Tuesday, September 22, 2015

Renters Face An Awful Future

From Real Time Economics:

Renters Will Continue to Struggle for the Next Decade, Harvard Study Says

Renting is unlikely to get easier anytime soon.

An estimated 11% more households will pay more than half of their incomes in rent in 2025, according to a new report from Harvard University’s Joint Center for Housing Studies and Enterprise Community Partners, an affordable-housing organization.

The situation could have significant policy implications. Renters who are severely cost-burdened—meaning they pay more than 50% of their incomes in rent—often require federal subsidies to find an affordable place to live. The private sector is struggling to produce profitable housing that is affordable to lower- and moderate-income families, while many federal housing subsidies have been cut in recent years.

In 2013, one in four renters, or 11.2 million households, paid more than half of their incomes in rent. That is three million more households than in 2000.Many of the factors contributing to that rise were considered temporary. Millions lost their homes due to foreclosure and saw their incomes stagnate during a sputtering economic recovery. But the report finds other factors that have put a strain on renters are likely to persist and contribute to longer-term challenges.

Rapid growth in the Hispanic population is one such pressure, because Hispanics tend to be disproportionately renters and are more likely to pay a large share of their incomes in rent, thus putting more pressure on the existing supply of affordable rental housing....MORE